Holidays will cost more, but you can limit the damage: Some destinations are still cheaper than a year ago, and you can lock into deals now to protect yourself

British travellers woke up to the fact that their holidays in the sun this year have just shot up in price following the vote to leave the European Union.

In the seven hours after the polls closed, the pound plunged by 8.6 per cent against the euro. But by the end of the working day it had rallied, showing a fall of 6 per cent – meaning £1,000 spent abroad will cost holidaymakers £55 more.

It marks one of the sharpest falls in sterling for 38 years and was more severe than that seen at the peak of the financial crisis in 2009.

Holiday costs: £1,000 spent abroad will cost holidaymakers £55 more as the pound plunged against the euro

More than one in ten Britons now say they are less likely to be taking a holiday on the Continent this year, according to a poll of 6,000 by Comparethemarket.

Gemma Sonfield, head of travel at the comparison website, says: ‘If this is the case, that may be more than six million people from the UK avoiding the beaches of the Mediterranean and possibly opting for a “staycation” instead.

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HOW THIS IS MONEY CAN HELP

‘The reluctance of Britons to jet off to Europe this summer may be, in part, triggered by a sense of greater financial instability as well as the fact that a bowl of moules frites, gelato or glass of sangria may get more expensive.’

But it isn’t only trips to the Continent that will be more costly. In the space of just one day the pound fell 8 per cent against the US dollar. In fact, most major currencies reacted negatively to the news, partially offsetting the weakness in sterling.

Those exchanging £1,570, the typical sum spent by a family of four, are seeing their holiday budgets squeezed sharply, according to currency exchange specialist Caxton FX.

A year ago this sum bought €2,200. Now it buys just €1,920, meaning families have about £225 less to spend, forcing them to cut back on sightseeing trips, treats and meals out.

Even the cost of holidaying in Britain could rise if locals stay at home and more tourists flock to our shores, attracted by the weak pound. This would drive up the price of hotels and restaurants.

The cost of driving will rise as petrol is priced in dollars. AA president Edmund King says: ‘Fuel prices will be the biggest immediate concern of drivers with the weaker pound and Chancellor’s prediction that leaving the EU would lead to fuel duty rises.’

For those who venture abroad, there are ways to limit the damage:

South Africa, Russia, Argentina and Zambia are as much as 60 per cent cheaper than last year as their currencies have weakened further than the pound.

Lock in exchange rates with a pre-paid currency card. Ian Strafford-Taylor, chief executive of currency exchange firm FairFx, says: ‘If you’re happy with the current exchange rate on offer, buy currency now to guarantee that rate for your future holiday.’

Never leave changing your travel money to the last minute. Uncompetitive rates at airports mean you can lose £1 in every £10 by buying your currency at an airport bureau de change compared with securing the best rate over the internet in advance. Consider setting up a currency tracker with a foreign exchange specialist so that you will be alerted when rates improve.

Chris Towner, chief economist at HiFX, another exchange rate specialist, says: ‘Compared with a year ago, sterling is lower by 12.7 per cent against the US dollar and by 11 per cent against the euro.

‘Overall the forecast is for further volatility. If you know that you are definitely going on holiday, buy your holiday money now.’

James Stanton, deVere Group’s head of foreign exchange, says: ‘The Brexit victory has dragged the pound down, as was expected. But the scale of the drop has been a shock – it plummeted to its lowest level against the dollar since 1985.’

But as the dust settles, the rate against the dollar and euro should stabilise. Also travel insurance for holidaymakers heading to the Continent will continue as it is, according to the AA, and the European Health Insurance Card, which provides reciprocal health cover in EU countries, will continue to apply for the time being. But in future, travel cover could become more costly if the EHIC is no longer valid.

Once the UK leaves the EU, roaming charges on mobile phones, which were slashed just two weeks ago and would have been virtually abolished for British travellers to EU countries from June 2017, will shoot up if the UK is not signed up to the agreement on how much European mobile networks can charge travellers. Likewise, the EU rules on compensation for flights to or from a European airport that are delayed by more than a few hours could be scrapped.

ON THE PLUS SIDE

Even with the weaker pound, holidaymakers will see price falls at certain resorts. A survey by Post Office Travel Money using Friday’s exchange rates found that petrol, supermarket shopping and eating out are all still cheaper in many popular holiday destinations than they were a year ago.

Local prices have fallen for key tourist items in favourite destinations such as Spain, Portugal, Cyprus, Greece, Bulgaria, Croatia and Italy. For example, in Spain’s Costa Blanca prices for ten tourist staples have fallen by 1.4 per cent over the year with a glass of wine typically costing £1.65 and a cup of coffee costing just 66p on average.

Self-caterers will find supermarket prices have dropped year-on-year in a number of eurozone resorts including Crete, where the cost of a week’s shopping is down seven per cent to an average £60.26 and is three per cent lower in the Costa Blanca at £48.26.

The fall in the cost of crude oil has pushed the price of petrol to below a pound a litre in Andorra (86p) Austria (88p), Luxembourg (93p) and Spain (97p).

Dinner in Paris? Put it on the right card

By Sally Hamilton

Families heading to the Continent on holiday will need to dig deeper while away.

The costs of entry to tourist hotspots such as Paris, Pisa and Venice will cost as much as 15 per cent more than a year ago, if you exchanged your pounds for euros on Friday.

Travellers to US favourites such as Florida and New York will also feel the squeeze. The dollar is worth nearly 12 per cent less than a year ago raising the cost of entry to popular sights.

If you have not already bought currency, avoid relying on your usual credit and debit cards to foot the bill. That can be the most expensive way to pay your way.

Apply for a card designed for use abroad, such as the Halifax Clarity, Creation Everyday and MBNA Everyday Plus.

Customers with a Norwich & Peterborough Building Society’s Gold Classic current account get the best debit card, while Metro Bank customers get a good deal too with no currency transaction charges – but only in Europe.